Minister Wang Mei-Hua's oral administrative report to the 5th session of the 10th Legislative Yuan, the 9th Plenary Meeting of the Economics Committee

Date: 2022-03-28

The following content is a translation of excerpts from the Minister's report.

Dear Chairman and Legislators,

It is such a pleasure for me to deliver the Administrative Report of the Ministry of Economic Affairs (MOEA) before the Economics Committee. I will briefly explain current economic circumstances and the focus of the MOEA's administration. Please advise as necessary.

Current Economic Situation

Last year (2021), the epidemic in Taiwan was effectively controlled. Due to the continuity of the production chain, and with the outstanding performance of products from technology and traditional industries, annual exports reached US$446.38 billion, a growth of 29.3% compared with the US$345.13 billion in exports from the previous (2020) year, achieving a new record high. Our stable and secure supply chain has driven the achievement of the NT$1.5 trillion in the Three Major Programs for Investment in Taiwan ahead of schedule; coupled with the expansion of investment by semiconductor manufacturers, accelerated construction of green energy facilities and 5G networks, the efforts will altogether increase investment momentum. Driven by both exports and investment, the domestic economy grew by 6.45% last year, hitting an 11-year high. This year (2022), the international economy will continue to recover. However, due to uncertainties such as the spread of new variants of the virus and Russian-Ukrainian conflict, growth momentum has slowed. According to global forecasting institution IHS Markit, global economic growth is expected to be 3.27%, down from the 5.77% of last year.

As we look to the domestic economy this year, strong external demand and the advantages of the semiconductor industry are expected to infuse much vitality into exports; coupled with the increases in the basic wage and salaries for military, civil servants, and educators, and corporate profits providing favorable conditions for salary increases, the growth of private consumption will be stimulated. In addition, the expansion of investment by semiconductor manufacturers, return of Taiwanese businesses, and accelerated construction of green energy facilities will all help continue to support investment momentum. According to estimates made by the Directorate General of Budget, Accounting and Statistics (DGBAS) of Executive Yuan, on the high base period of last year, Taiwan's economic growth this year remains good at 4.42%.

Direction and Implementation of the MOEA's Administration

Beset by the challenges of the trade and technological disputes between the US and China, the pandemic, and extreme weather, the global supply chain has become regional, local, and diverse; resilience, security, and sustainable development have thus received increasing attention. Within the turbulence of the current international economic and trade situation, we have allowed the world to see the importance of Taiwan in the global supply chain. The MOEA will seize this opportunity to expand upon Taiwan's industry advantages, deepen international economic and trade cooperation, promote diversity in key supply chains, and simultaneously create a low-carbon sustainable environment while increasing the appeal to domestic and foreign investment.

1. Enhancing industrial capacity: Further enhance the leading edge in semiconductors, establish an independent 5G industry chain, establish an electric vehicle (EV) supply chain, accelerate development of the biomedicine industry, and promote digital transformation.
    
2. Increasing momentum of domestic demand: Reinforce and extend the Three Major Programs for Investment in Taiwan, promote foreign investment, increase consumption, attend to enterprises, and stabilize prices.
    
3. Expanding international engagement: Promote relevant amendments to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), expand economic and trade cooperation between Taiwan and the US; strengthen economic and trade ties between Taiwan and the EU as well as between Taiwan and Japan; and promote economic and trade links with New Southbound countries.
    
4. Moving towards net-zero sustainability: Ensure stable power supply, promote net-zero transition, accelerate development of renewable energies, and diversify and stabilize the water supply.

Conclusions

Dear Legislators, as we face the turbulent situation in the global economy and trade in recent years, Taiwan has not only achieved outstanding economic performance benefiting from its resilient economy, it has also allowed the world to see the importance of Taiwan in the global supply chain. We will seize the opportunity to strengthen our competitive advantage in the global supply chain, so that Taiwan can operate steadily and over a greater distance, and thus demonstrate its indispensable role in the world.